All right. Good morning, everyone. Thanks for joining us here, day two of the Leerink Partners Global Healthcare Conference. My name's Tom Smith. I'm one of the senior biotech analysts here at Leerink, and it's my pleasure to welcome our next company to the stage, Connect Biopharma, and happy to be joined up here by CEO Barry Quart. Barry, thanks for joining us.
Thanks for letting us come.
Barry, why don't you go ahead and kick us off with a little bit of a brief overview of Connect. Walk us through what you've been working on here over the last 12 months and what you're most excited about for 2026. Obviously, some important data right on the horizon here with your Seabreeze studies. Why don't you go ahead and kick us off?
Absolutely. Love to. Thank you. Connect is developing a next-generation IL-4 receptor alpha monoclonal antibody, a next-generation DUPIXENT. The product has demonstrated excellent activity in both atopic dermatitis and asthma. One of the things we found in the chronic asthma study that was quite exciting was a very rapid onset of effect for a biologic, where we saw very dramatic improvements in FEV1, so lung function, in patients in less than 24 hours. As we delved into the data further, we realized that, you know, the activity was happening very, very quickly, opening up the opportunity to potentially look at an area that really has been ignored for really over 50 years, and that is treatment of acute exacerbations.
The treatment of acute exacerbations of both asthma and COPD is the same as it was 30+ years ago. It's a bronchodilator and prednisone. What we find is that while that temporarily can get the patient stabilized, they have a really unfortunate progression where half of the patients are seeking additional medical care within four weeks, and many of those patients coming back to the ER, to the hospital, where there's a significant health economic benefit to the hospital for keeping those patients well, keeping them at home, 'cause they don't get paid a second time in that four-week period. We've set out to investigate this. We've initiated, as you mentioned, two studies, one in asthma patients, one in COPD patients. These are patients having acute exacerbations.
They get standard of care and then randomized to our drug, rademikibart, or placebo, and we're looking at the rate and the time to treatment failure in these patients over the four-week period after treatment. We anticipate top-line results mid-year. In the meantime, because there was a pretty strong relationship between the onset of effect in terms of airway function and when the drug is released from the subcutaneous depot, we felt like we could speed up the onset even further by administering the product intravenously, and that's an ideal approach for the emergency department setting. We're conducting a small IV study in stable asthma and COPD patients looking to see if we can in fact start to see improvements even earlier than with the subcutaneous administration.
That data will be out late this quarter, so later this month, and we're hopeful that that demonstrates the same kind of very significant benefit we saw in the prior study, but just a much faster onset of effect. That will allow us to move into the IV setting for acute treatment and then keep the subcutaneous auto-injector approach for chronic administration. The benefit there is we can price them differently, and that's really critical in order to get good adoption in the ER hospital setting. You need to make sure you keep your price within a certain range. There's more flexibility in the outpatient setting. Having two distinct presentations gives us that opportunity. It's gonna be a very exciting year.
Earlier this year, we put out some very intriguing biology data, which showed that even though we target the same receptor as DUPIXENT, we bind very differently at a different location, and because of that, the drug receptor complex is internalized to a much greater extent. That results in a different safety profile, and a different efficacy profile for our product, where one of the safety differences is we see a modest decline in eosinophils, where with DUPIXENT you see a pretty substantial increase in eosinophils, and that is important in patients who you're already targeting people with high eosinophils to start with.
On the efficacy point of view, what we found is that in precision-cut lung slices that our drug allowed the beta-agonists, the go-to rescue drugs for asthma and COPD patients, it allowed those beta-agonists to work better, where DUPIXENT had no impact on the effect of the beta-agonist. We believe that the differential benefit that we see there probably plays a role in why we work so quickly as well. Long IP on the product into the mid-2040s. We have cash into next year. We are really, you know, primed for a very exciting year with some significant catalysts.
That's great. Yeah, excellent overview. Obviously we saw the mechanistic data you released in January, very intriguing. Maybe if you could just describe, I guess, some other attributes of the compound. Like you kind of frame this as a next gen DUPIXENT. When we think about, I guess, binding affinity to the receptor or potency or half-life, like how does, you know, how does the compound compare versus DUPIXENT? Then are you generating additional mechanistic data that we might see here over the next, call it six to 12 months as we approach the Seabreeze readouts?
Yeah. We are certainly continuing to delve into the unique differences that we saw and that we presented earlier this year in terms of mechanism of action. We hope to have some additional information coming out in the next few months. You know, continuing to go down the path of how we are differentiated from DUPIXENT. I think that you know, the reasons that we see our product as distinct and certainly the next evolution in terms of IL-4 is you know, a differentiated safety and efficacy profile. Half-lives are a little complicated in terms of the fact that these drugs are usually have saturable clearance. At high concentrations, they have very slow clearance. At lower concentrations, they have faster clearance.
We believe our product has two advantages there, a somewhat longer half-life, as well as because of the very significant difference in internalization, when the receptor drug heterodimer complex is internalized, that receptor is no longer on the cell surface to be, you know, activated. As such, you get a longer duration of benefit. Even though the drug levels may drop below a therapeutic level, you still have removed the receptors from the cell surface. We believe that has something to do with what we see in atopic dermatitis, where we have excellent efficacy at Q4 weeks.
In the same study that we basically followed the path that was done with DUPIXENT, where they took patients who had been started on Q2 week dosing, randomized them to stay on Q2 week or go to Q4 week. While our Q4 week data looked identical to the Q2 week, they saw a significant drop-off of effect at Q4 weeks. We clearly have a longer functional half-life than they do.
Got it. That makes sense. I wanna go in kinda chronological order here for data, and we're gonna see you have this IV study. Just help frame, I guess. It's a small pharmacology study, but, like, what, you know, specific kind of PK/PD markers should we be looking for?
Well, I think that, you know, from our perspective, again, the goal was, number one, the study has several parts. The first part was just giving the IV in healthy volunteers so we knew what the pharmacokinetics was, that it could be given safely, and to get a sense for what's the ideal timing for administration. We determined that it can be given as a two-minute IV push, no problem, very well tolerated. The PK really wasn't any different between that and giving it as a, you know, a 10, 15-minute administration, so no reason not to be, you know, a little quicker, which is more convenient for an ER setting. The next phase was looking at patients, and the goal there is do we see an earlier onset of effect?
In these patients, you know, the FEV1 bounces around a lot. It's not rock solid stable. We're hopeful in this small study that we do see a nice trend in terms of earlier onset of improvement in FEV1. When we say that, it's pretty clear from the literature that in COPD, for example, anything over about 100 mL is clinically relevant to patients. They can feel that. It's related to reduced exacerbations. Same thing in asthma. We'd certainly like to see the kind of benefit that we saw in the chronic study, which was about 250 mL-350 mL improvement across the two arms in the prior study. We'd certainly like to start to see that, but just much faster.
That makes sense. Let's talk about the decision to move into these indications. Maybe just take a step back and frame for us sort of the commercial opportunity in the acute asthma and acute COPD setting. We're moving into really an acute care setting, but there's literally, I think you said this in your opening comments, there's not much to help these patients, unfortunately.
There's two aspects to it. One is, can we acutely benefit the patient while they're in the ER, get patients out faster and prevent many of them from being hospitalized versus discharged. That's a very significant opportunity where we can benefit patients and provide a very significant health economic benefit to the hospital and to payers. The secondary component is that right now, when these patients are discharged, as I mentioned, almost half of them end up either coming back to that same ER or seeking medical care elsewhere because they continue to progress or after two, three weeks, they have another exacerbation.
Our goal is to also, you know, hopefully prevent those patients from needing additional medical care, and certainly an improvement in airway function, you know, 100 mL-200 mL should have a pretty dramatic benefit in terms of them feeling better and not requiring additional courses of prednisone. That's a significant clinical benefit to the patient. These are all the things that we'll be looking at in these phase IIs, ultimately taking that to the FDA and getting agreement on what the phase III program would look like based on the data that we generate in the phase II. As you know, in terms of your question, we see this as a complete wide open opportunity from a competitive standpoint. There's no other drugs in development.
There hasn't been any drug developed or approved for acute treatment since the beta agonist over 50 years ago. All of the current biologics that are approved for asthma and COPD not only do they not have an acute indication, they actually have a warning, in the warnings and precautions section stating, "Do not use to treat an acute exacerbation." Achieving this indication would give us complete dominance in this space. When we talk about numbers of patients, about a million patients a year with asthma and about 1.3 million patients a year with COPD go to emergency departments in the United States. Similar numbers in Europe. This is a global issue.
That's just the tip of the iceberg because you have over a million patients going to urgent care and even more patients going to their doctor's clinic. There are millions and millions of patients having acute exacerbations serious enough to go out and seek medical care. One of the really intriguing things about the preclinical data, the mechanism of action data that we put out earlier this year, was to demonstrate, number one, that IL-13, and as you know, we block both IL-4 and IL-13, that IL-13 not only directly produces bronchoconstriction, it shifts the dose-response curve of beta-agonists, making them less effective. When we think about patients having an exacerbation, particularly asthma patients, you know, their go-to rescue is their inhaler.
What you find is that many patients end up at the ER because they used their inhaler and it didn't work. We think a lot of that underlying reason for it not working is, in fact, excess IL-13. We've demonstrated in preclinical experiments we can reverse that effect, and so we're very hopeful that we start to see a benefit in patients within a very short period of time.
That makes sense. I wanna come back to one of the things that you mentioned around this being a white space, and in fact, a lot of the biologics that are used in a chronic setting are actually labeled against use in the acute setting. What's your view or perspective? We get this question from investors fairly frequently. Like, why haven't other companies developed their biologics in this space? Is it a trial design execution or regulatory pathway, or it's an attribute of how they feel their compounds work and onset of action type of thing? Like, why do you think it is such a white space?
Well, I think taking that last point first, I think when we think about biologics and particularly the anti-inflammatory effects of blocking these inflammatory cytokines, you anticipate that's going to take days to weeks. What's interesting is that a group of investigators had the same idea that we had, actually earlier, and conducted a study with benralizumab, an IL-5 long half-life, with the concept of let's treat patients having acute exacerbations, both asthma and COPD, and let's see if we can benefit them. They showed that after three weeks, they started to see a nice separation in the percent of patients having what they call treatment failure. In other words, seeking medical care for symptoms. They had no benefit, no separation of the curves for the first three weeks.
That's a great example of these drugs can work very well chronically, but they don't have the kind of activity early on that would allow them to benefit the patients acutely. That's the thing that I noted from the data that was generated with our product in the prior asthma study was the onset was just much faster than we would have anticipated. We think it's because of this much tighter binding and the differential in that that binding allows us to have a different profile in terms of onset of effect.
Got it. That makes sense. Let's talk about the Seabreeze STAT overall trial designs and maybe just give us a little bit more detail around, you know, the patient population that you're targeting, how you're dosing the patients, and how you've defined treatment failure in this proof of concept setting.
Sure. You know, we've decided that with the publication of the ABRA study, which is the study I just mentioned, using benralizumab, that was the most contemporary data ever generated on trying to treat patients having acute exacerbations. Let's use that as a guidepost in terms of how to conduct a successful trial. We're using the same approach of looking at treatment failure. These patients, they're discharged, they receive the drug, they're discharged. Do they come back to the ER? Do they seek medical care from, you know, a clinician or urgent care? That would be considered a treatment failure. We're using that same endpoint. In the ABRA study, they had about 45% of patients within four weeks reaching a treatment failure endpoint.
We had, based on claims data and publications, we had anticipated around a 50% failure rate. They came in very close to what we had predicted. We're using the 45% for standard of care in our study. We've powered it about 85% to see a 50% reduction in that treatment failure. With the rapid onset of effect, with the very substantial improvement in FEV1 that we see, we're quite hopeful that we'll see that 50% or even greater benefit to patients in terms of reduction in treatment failure. We're also, as I mentioned, collecting additional FEV1 data, symptoms, how long patients, you know, if they're hospitalized, how long they're hospitalized, all of the endpoints that could be interesting from a health economic standpoint.
Quite a data-rich pair of studies. Maybe just topline data in the middle of the year. Like, give us an update on enrollment, site activation. I guess, I mean, I envision there being a number of challenges like trying to enroll patients in like an acute care setting. But I think you've taken some pretty novel approaches to try to drive enrollments. Maybe just elaborate on that.
Yeah, great. Great question. Thank you. You know, one of the reasons, as you noted, that you know, very few, if any, companies have focused on this area, is that it is a challenge. You know, people you know, have obviously done very large studies in chronic asthma and COPD. There you're going to a pulmonologist or allergist. They're seeing patients. They enroll the patients that they've seen maybe several times over the course of the last few years, into these chronic studies, continue to monitor them. In an acute setting, you're trying to find patients coming into the emergency room. Emergency rooms are chaotic. Not a lot of clinical studies done in the ER setting, this has been a challenge to set it up.
As you noted, we've taken the approach of having kind of a dual pathway to enroll patients. One is exactly as you would anticipate, finding people in the ER having an acute exacerbation, or having been discharged in the last, you know, 24, 48 hours from that acute exacerbation. The other approach is going to those pulmonologists, allergists that normally enroll chronic studies and having them go through their patient files, find people who have had several exacerbations in the last year, are likely to have another one. Kind of pre-enrolling those patients. They get informed consent in a much calmer environment than the ER. Baseline data is collected.
They get a card that says, "If you're having an exacerbation, call this number, go to this clinic, and you'll get the drug." So that has opened up the opportunity to have really another dynamic enrollment approach for patients who are, you know, initially being seen in a, you know, non-emergency room setting. What's intriguing is that so far the timeline from that pre-enrollment to actually having an exacerbation is less than two months. The clinicians are doing a great job at identifying people that have a high likelihood of an exacerbation in the future.
That makes sense. Yeah, I guess any more granularity you can give us in terms of, like enrollment progress, and I guess just level of confidence that you're on track for the mid-2026 top line?
Well, we're very confident at the rate of enrollment currently. We have even a large group of additional sites coming on in the next week or two that will hit the midyear timeline that we've put out. We're doing studies in both Northern and Southern Hemispheres, so we have the opportunity of hitting the high peak periods for both asthma and COPD in, you know, both North and South. Yeah, we're certainly doing everything we can to make sure that we deliver the data on schedule.
Yep. That makes sense. Okay. I want to ask you about some of the payer work that you've done. You talked about, you know, one of the benefits of having both an IV and sub-Q is potential for differential pricing. Like, what does your early market access work suggest is like a reasonable price band for something that is used in the setting in which you're studying it in Seabreeze?
What we found was, I have to say, I was very pleasantly surprised that payers were much more willing to pay for a biologic in the ER hospital setting than I expected. There are no biologics in that setting. I expected a lot of pushback, and in fact, they really understood the opportunity for patient care, as well as health and economic benefit to them. But the one constraint was that there's a relatively small band that they were willing to look at, and that's in the $600-$700 a dose range. Now, DUPIXENT is $3,800 WAC for a month.
Clearly, that's why biologics are not in the hospital today, is because obviously there's a great deal of money to be made in the outpatient setting, and companies don't want to sell their product at a lower price. Having the opportunity, as we discussed, to have a completely different presentation that has been used previously by companies, it worked successfully, no pushback from payers on that, and they felt very good about that, the price range I noted for the ER and then outpatient is kind of a different pool of money.
Yep, that makes sense. Let's talk about that. Because you've also. I think you have some market research suggesting perhaps it's three-quarters of patients that would start on a biologic in an inpatient setting or acute care setting may continue on chronic therapy. Like, just talk about what would be needed to drive that evolution of the treatment paradigm and drive, I guess, continued use in the chronic setting.
Yeah. Thanks for noting that. I mean, one of the things that we found that was very exciting was that having an acute indication, just being differentiated by having an acute indication, knowing that the drug starts to work quickly, completely altered the perception of the product for use chronically, significantly increased interest in chronic use by clinicians. But what was profound was that patients who received the drug acutely, 75% of the time clinicians wanted to keep the patient on the same drug chronically. That acute indication was really a gateway to significant chronic utilization.
Again, looking out in the future, at this point, we don't see any other biologic that's gonna have the same indication, so it's an opportunity to own the hospital space as well as drive chronic administration with that very unique profile, and having patients experienced it successfully in the acute setting.
That makes sense. Just in the last 30 seconds or so that we have, wanted to ask you have a partner in China, Simcere, who's on file with atopic dermatitis. They're gonna have a late-breaking oral presentation at AAD.
Yes
Their one-year AD data. Maybe just remind us of the partnership there, some of the downstream economics. It seems like a potentially nice source of non-dilutive capital.
Yeah, absolutely. Our partnership with Simcere, which was signed a few years ago, they have moved very quickly to conduct a one-year atopic dermatitis study. As you noted, it's gonna be presented as a late breaker at AAD end of the month. We're very excited to have that data go out. I think people will be quite impressed by the results, which is why it was selected as a late breaker. They also have a New Drug Application pending in China. We anticipate approval hopefully, second half of the year. That will result in significant milestones. We haven't disclosed the exact details, but there's $110 million in milestones remaining on our agreement. That's regulatory development and commercial milestones.
I can certainly say that approval of the first approval in AD, and then ultimately approval in asthma. They have a large chronic asthma study ongoing. That should be done early next year. Those two will be significant milestones to the company. We get tiered royalties starting at high single digits going to low double digits. China is a very large market opportunity. A lot of patients with respiratory issues, a lot of atopic dermatitis issues. I'll just also highlight that, you know, as everybody's heard, the FDA has been much more vocal about accepting a single phase III trial. Now getting them to accept totally all foreign data is obviously difficult.
We believe that the phase III studies coming out of China will be excellent supportive data for, you know, a single additional trial in the West and, you know, dramatically reducing the cost and risk of developing the drug chronically in asthma and for somebody who wants to ultimately acquire this product in AD as well.
Yep. That makes sense. All right. Unfortunately, we're up against time. Barry, thank you for joining us and sharing the insights and a lot of important data to look forward to here over the next 12 months.
Well, thank you very much. Appreciate it.
Thanks.